Lien released against Georgetown Cupcake

WASHINGTON – Michael Neibauer of the Washington Business Journal reports “The D.C. tax office has released its lien against Georgetown Cupcake less than 24 hours after it was filed over nearly $190,000 in unpaid sales taxes.”

The Office of Tax and Revenue lien, filed with the Recorder of Deeds, states that the bakery — featured on TLC’s “DC Cupcakes” reality show — owes $189,282.71 for three months of unpaid collections, including penalties and interest. The store owes $69,571.78 from August, $66,363.74 from September and $53,357.19 from October, according to the lien.

An attorney representing Georgetown Cupcake acknowledged that a series of sales tax returns were filed last fall without checks. Negotiations were ongoing between the cupcakery and the tax office regarding a settlement offer, but those talks apparently hit a snag, the attorney said.

D.C. tax officials said Georgetown Cupcake is aware of the debt and was told this week a lien against its assets might be filed. If the bill isn’t paid, they said, the next step could include seizure or the removal of the store’s sales tax certificate, which would shut the operation down.

“A lien is really a last resort because we work with the taxpayer to bring them into compliance,” said Natalie Wilson, tax office spokeswoman.

“This is money collected on behalf of the District, from people who patronize their establishment, and it has to be turned over to the District, and we are taking aggressive action,” she continued.

Georgetown Cupcake, founded in early 2008 by sisters Katherine Kallinis Berman and Sophie Kallinis LaMontagne, may not have started the cupcake craze, but it certainly helped D.C.’s cupcake industry explode. From their store at 3301 M St. NW, the sisters crank out thousands of cupcakes every day to feed legions of fans.

The sisters landed their own reality show on TLC, appeared as guests on numerous daytime talk shows and opened outposts in Bethesda, New York’s SoHo and Times Square areas, Los Angeles and Boston, with a seventh location in Atlanta coming soon.